European Union: who do you believe?

As the future of Greece and the euro are again plunged into uncertainty, is there any more certainty to be found at home in the UK?

The unexpected decision of
the Greek government to call a referendum on the Euro-area austerity package
has once again thrown the future of Greece and the euro into doubt. But at the
same time doubts are also starting to surface about the credibility of the Tory
Euro-sceptic back bench revolt launched in the House of Commons two weeks ago
and widely hailed as the start of a nation wide campaign to take the United
Kingdom out of the European Union.

Paradoxical as it might seem,
the doubts have been triggered by the steps taken by the 17 nation Euro-area
group to create an economic and eventually a political union in the heart of
the EU. Questions are now being asked about precisely what alternative
relationship with the EU the Euro-sceptic right wing now envisages and how it
is to be achieved.

Some Tory sceptics are
already making it clear that they do not actually want to see the UK completely
abandon membership of the EU. This group would prefer to seek further ‘opt
outs’ from some existing legal obligations to respect minimum EU standards notably
linked to the rights of employees and especially of women. The Cameron
leadership of the Tory party agrees with this approach but is doubtful it can
be achieved unless and until the 27 EU states are asked to approve major
changes in the EU Treaties to facilitate a Euro-area ‘economic government.’

The hard liners retort that
some Treaty changes will be sought in the near future as a result of the
measures to strengthen the Euro-area’s defences in Brussels last week. These,
they insist, should be used by London to trigger a UK referendum with the
belief that a resulting ‘No’ vote result would force a major re-shaping of the
terms of British membership of the EU or better
still right out of the Union.

They point to new legislation
already passed into law by Parliament committing the government to call a
referendum on any new Treaty changes which would lead to a transfer of further
powers from the UK to the EU. The trouble with this is that the treaty changes
likely to be put for approval in the next few months will not require any ‘transfer
of sovereignty’ to the EU since Britain will not be affected by the planned
strengthening of the Euro-area.

The most which the British
government might be able to secure as a result of the immediate treaty changes
would be some further assurances that the UK and the nine other countries which
are currently outside the Euro will
continue to be involved in decisions affecting matters such as the single
European market. However the ‘Outs’ will not be able to prevent the 17
Euro-area ‘Ins’ from holding all the key meetings affecting the running of the
single currency by themselves alone.

This, to be sure, will not be
the end of the story. Germany, France and the other Euro-area states want to
follow the limited measures to reinforce the collective governance of the
single currency with a far more ambitious new Treaty over the next few years.
The first step will be the presentation of an important
paper setting out the need for further economic and political integration
by the President of the European Council, Herman von Rompuy, at the next EU
summit in December.

We already have some idea of
what might be involved following the
debate which took place with Chancellor Merkel in the German Bundestag a
week ago. Berlin is anxious that a step by step creation of a Euro-area
economic government must be balanced by new measures to strengthen democracy at
the European level. These could
include the direct
election by EU voters of future Presidents both of the European Commission
and the European Council itself. This
will make it difficult for those sceptics who trade almost exclusively on
claims that people are being denied a vote on EU issues.

It is at this point that
David Cameron sees a chance to bargain cherry picking rights on the existing
obligations of the UK within the EU in return for not blocking the new treaty.
But this will not be easy to achieve since most Liberal Democrats know it would
be political suicide for them to back Tory moves to abolish the social
reforms brought by EU membership in recent years.

There is a view elsewhere in
the EU that far too many concessions have already been made to the ‘half in –
half out’ terms of existing British membership. The constant slide in the value
of sterling is seen as undermining the spirit if not the letter of the single
market. A weakening pound has produced little benefit for UK exporters but has
encouraged higher levels of inflation in Britain than elsewhere.

There is already some talk in
Brussels and other capitals that it might be better to make provision in the
second set of Treaty changes for some
kind of “associate membership” of the EU which might be offered to the UK.
This would certainly cheer the hard line euro-sceptics who already cite
Norway’s relationship outside the EU but within the European Economic Area as a
desirable model.

They should think again.
Norway is bound by all the laws and regulations adopted by the EU for the
running of the single market – but it has no part in taking those decisions.
Moreover Norway has to pay heavily for this relationship by making substantial
payments through the European Union budget to assist the less developed EU
countries. In any case talk about the UK forging a new alliance of Poland and
other ‘Outs’ is undermined by the determination of most ‘Outs’ to become
Euro-area ‘Ins’ as soon as possible.

But is this really a problem
between the UK and the Euro-area/EU? As Gerry Hassan has pointed
out in openDemocracy, the UK ‘Union’ may be more at risk of imploding than
the European Union. The debate about the big EU Treaty could well coincide with
the referendum on Scottish independence. There is little enthusiasm in Scotland,
Wales or Northern Ireland for any change in Britain’s place in the EU which
placed at risk EU finance for development.

Little wonder that the
Euro-sceptics have no coherent vision for the future. They no longer even dream
of becoming some kind of 51st State of the US or of forging some
mythical union of English speaking Commonwealth states. Ultimately a split
between those Euro-sceptics who dream of keeping one foot in and one out of the
EU and those who simply want to leave lock stock and barrel might even destroy
the Tory party itself.

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